Skilling's case stands apart in corporate crime

Ex-Enron CEO, to be sentenced Monday, driven by business vision

Published 5:30 am, Sunday, October 22, 2006

Whatever his sins and the legal price to be placed on them Monday, Jeff Skilling will not go down in history as the typical corporate looter of the 1990s. Unlike those who raided the till for personal extravagances, he wanted his company to get rich — and him along with it — by pushing the limits. He pushed and pushed, eventually too far, to the dismay of all who put their faith in him and his vision.

From his first days at Southern Methodist University in the early 1970s, when he used savings from a high school job to buy stocks on margin, Skilling was a die-hard believer in free markets. He wiped out in his novice effort, but his dedication never wavered.

Years later, Skilling got his ultimate revenge, not only from his conversion of an old-style pipeline company into a trading behemoth — the sort of New Economy transformation that business journalists in the 1990s tripped over each other to praise — but from the market's validation of his ideas. The value of Enron's stock soared. He predicted it always would.

As the value of Enron's stock rose, so did Skilling's hubris (and personal wealth), the praise heaped on him and the attendant sense of invulnerability. And when the price dropped in 2001, he took it personally.

The nerdy kid from Aurora, Ill., the sort of quiet loner that nobody remembers, had grown up to be the darling of an industry and a Business Week cover boy. He had bragged that Enron would create trading markets where none had existed before and eventually become the world's largest company. But when too many ventures flopped and the extent of Enron's debt began to emerge, the ultimate market, the New York Stock Exchange, turned its back on him. He resigned in August.

By the end of October 2001, with Enron's demise all but sealed, Skilling could not believe the rapidly unfolding events. In Conspiracy of Fools, a chronological reconstruction of Enron's rise and fall, author Kurt Eichenwald described how, after a night of heavy wine drinking, Skilling cracked beneath the weight of realization.

"Everything I worked for my whole life is just gone, just destroyed," he sobbed to fiancee Rebecca Carter.

This is what it had come to: the superstar CEO, the man behind the self-proclaimed "world's coolest company," burying his tear-stained face in a pillow.

Over the next two years, things didn't get any better. Skilling was raked over the coals during congressional hearings and in press accounts of Enron's collapse. In February 2004, he was hit with a federal indictment alleging he had conspired to keep the stock price up for personal enrichment.

Unlike late chairman Ken Lay, who pleaded his innocence in a public campaign, Skilling, 52, has kept a low profile in recent years, spending most of his time with Carter, whom he married, and his two children from a previous marriage.

Shortly after the indictments were returned, he did a television interview with CNN's Larry King in which he asserted again that he believed the company was in "great shape" when he left.

And then there was the strange episode in New York in April 2004 in which an intoxicated Skilling reportedly was harassing strangers in two New York bars. Police took him to a New York hospital for observation. He was not charged with any crime, but the incident led a federal judge to order him to quit drinking, find some volunteer work to do and be home by midnight. Shortly thereafter he entered treatment for alcohol abuse and began working with Habitat for Humanity.

The alcohol-tinged evening was repeated in Dallas on Sept. 9 when he was arrested for public intoxication while walking in an area near downtown known for its trendy bars and restaurants. He later paid a $385 fine.